People line up at a vaccination center administering AstraZeneca Plc Covid-19 vaccines donated by Japan in Taipei, Taiwan, on Tuesday, June 15, 2021.
I-Hwa Cheng | Bloomberg via Getty Images
SINGAPORE — Asia-Pacific’s top-performing markets led global equity markets in the first half of 2021.
Vietnam’s VN Index surged 27.6% in the first half of this year ending June 30 — way ahead of the second-placed Taiex in Taiwan which jumped 20.5%, based on CNBC’ calculations.
In comparison, the S&P 500 gained 14.4% in the first six months of 2021, while the pan-European Stoxx 600 rose about 13.5%.
Winners
Here are the top performing stock markets in Asia-Pacific in the first half of 2021, based on CNBC calculations:
Other Asia-Pacific markets that saw robust gains include South Korea’s Kospi as well as the S&P/ASX 200 in Australia, which each rose more than 10% during the same period.
Losers
The FTSE Bursa Malaysia KLCI Index in Malaysia was Asia-Pacific’s worst performing market in the first half of the year, and dropped 5.8%.
The Philippines’ PSE Composite Index also declined in the first half of the year, dropping 3.33%.
The losses came as countries in Southeast Asia continue to battle a resurgence of Covid infections while vaccination rates of their populations generally remain relatively low.
China’s market ‘opportunity’
In mainland China, the Shenzhen component — Asia-Pacific’s top-performing market in 2020 — continued to see gains and jumped 4.78% in the first half of 2021. The CSI 300 index which tracks the biggest firms listed on the mainland, however, gained just 0.24%.
The Chinese market “clearly stands out as an opportunity for the second half,” according to Bhaskar Laxminarayan, Asia chief investment officer at Bank Julius Baer.
He told CNBC’s “Street Signs Asia” on Thursday that Chinese markets have underperformed since February “for no reason” beyond concerns over issues such as the regulatory environment.
“The underlying fundamental story in each of these companies that have constituted the index … that have caused this underperformance, are actually very positive,” said Laxminarayan.
Asia’s economic outlook
Looking ahead, Asia is expected to “broadly remain on a healthy recovery path,” JPMorgan Private Bank’s Alex Wolf said in a note on Tuesday.
“For investors, the bottom line is to expect continued divergence,” said Wolf, who is head of investment strategy for Asia at the firm. “Vaccinations, growth drivers, and policy are diverging widely across the region, and investors need to invest selectively and actively.”
The strategist highlighted three factors that investors should monitor over the course of the rest of 2021: China’s recovery, vaccination progress, and exports — in particular, semiconductors.
“We still favor Northeast Asia (China, Korea, and Taiwan) given their exposure to structural forces such as digitalization and semiconductor demand, but as vaccinations pick up the recovery will eventually spread to South and Southeast Asia supporting both their currencies and equity markets,” he said.
